Page 2 ECOMO58 (2020) Question 1 Consider the following trial balance prepared for the year ended on 31/12/2019 Dr ) C (E) 7.100 30.000 20.000 36.200 cash share capital furniture at cost accumulated depreciation (at 31/12/2018) inventory accrued electricity (at 31/12/2018) rent trade receivables electricity vehicles at cost accumulated depreciation (at 31/12/2018) sales cost of sales 12.300 28.600 2.300 40.000 14.400 152.600 63.000 209.500 209.500 Additional information: Furniture is depreciated using the straight line method, with a useful life of 6 years and a resale value of 2.000 Electricity is paid quarterly in arrears. The bill for the last quarter of 2019 is still outstanding. During the year, the company paid 500 for electricity consumed in the last quarter of 2018, and 600 each for the first three quarters of 2019. The company expects the cost of electricity to be stable (continues on next page...) ECOMO58 (2020) Page 3 A receivable for 2,000 is considered irrecoverable and needs to be written off A receivable for 1.500 is considered doubtful. Moreover the company needs to take a general provision for doubtful debts equal to 5% of the outstanding receivables Vehicles are depreciated using the reducing balance method, with a 20% yearly depreciation Prepare the adjusted trail balance at 31/12/2019. For each adjustment, show your workings and explain them